Capital One Won't Really Close Your Credit Card, Will Secretly Continue To Bill You

When Capital One “closes” your credit card account, they’ll continue to allow automatic withdrawals even though the account is closed. But they won’t send you a statement—you know, because it’s closed!—so that you’ll end up with late fees. Quenten experienced this first hand when he closed his account recently, and now Capital One has sent his account to collections over a $38.00 late fee for two 38-cent charges that he never knew about.

As expected, the CSR didn’t make canceling the card easy: “He spent roughly 30 minutes trying to convince me to keep my account open, offering me all these ‘features.'” Finally the account was closed and Quenten was told to make sure all automatic withdrawals “such as AOL” were moved to another card or canceled. The CSR didn’t mention any specific monthly charges, however.

Today in the mail I received a letter from Capital One stating that I have been sent to collections for owing $38.00. I figure this is a mistake because I closed my account, and have not received an email (I am on paperless billing), or a bill in the mail. I called the 1-800 number, as it turns out when I signed up for the card, I didn’t opt out for “Total Protection”, which is a very small fee that you pay each month, so that if you are unemployed and can not make a payment you are covered. So 20 days after I called to close my account “Total Protection” made a charge to my card for a whole 38 cents. Then they charged me another 38 cents for the month of January. This has ballooned to $38.00 now because of late fees. Speaking to the Capital One representative tonight, apparently when you “close” your account, it is not really closed. They leave it open for at least one billing cycle, to allow for any automatic withdrawals to continue. So several questions came to mind, and you won’t believe the answers,

1. If “Total Protection” was added to my card through Capital One five years ago when I signed up for it, shouldn’t it be closed when I closed my card? I assumed that since “Total Protection” was offered by Capital One that they where the same company.

Apparently not, “Total Protection” is a separate company, and Capital One will enroll you, but they will not inform the outside company you have closed your account.

2. Why was I not informed when I closed my account about “Total Protection” and given the number to call?

All Capital One is required to do (according to them) is read a generic discloser that states you should have all automatic withdraws stopped. They could not explain to me how I was to know that Total Protection service was not being offered by Capital One. When I asked how was I supposed to know the phone number to call this outside vendor, they told me I should have asked them when I closed my account. The Capital One rep. then gave me the phone number to call.

3. Why was I never sent a statement, paperless or otherwise, during the last two months I have been late?

Because my account was in a “closed status” they do not send out statements.

Something is wrong here, if they still allow charges to your account, and one is made shouldn’t they send me a statement?

When I called the “Total Protection” company they informed me that it is Capital One’s job to tell me I have this on my account and supply me with the phone number when I call to close my account, he then reversed the charges for the last two months. So now I am stuck with a collection on my credit report, and $38.00 worth of fees from Capital One, and a card still open. I really don’t feel I should pay these fees when I was never sent a statement about them.

Quenten, check out our fighting back guide which includes a link to Capital One contact info, and keep pressing the issue. Capital One did exactly the same thing to this writer in 2004, and I was able to eventually get the late fee waived and the account truly closed after several persistent phone calls.

(Thanks to Quenten!)


Edit Your Comment

  1. EmperorOfCanada says:

    +1 on the picture. Made me LOL.

  2. shadow735 says:

    also file a dispute with each credit reporting agency(if there is a negative report on your credit, Capital one has to respond if they dont they(the credit reporting agencys) remove it from your credit history.

  3. clevershark says:

    What’s (still) in your wallet?

  4. ARPRINCE says:

    Yeah…those “Total Protection” schemes are just money makers for them. You really don’t need them at all.

  5. mcpeepants says:

    had a semi-similiar problem with them 4 years ago – enrolled me in the $80 ‘identity theft’ program I never consented to. They waited until the billing date to remove the charge. And charged a late fee the same day. (had been a $0 balance before the fraud program) I told them take it off, kept getting compound late fees and interest. They sent it to collections finally. Talked to the lady at collections, she looked at the charges, and said I should never be bothered again. Charges wiped, and my Capital One card was mysteriously never renewed heh.

  6. AlteredBeast (blaming the OP one article at a time.) says:

    Just an idea…when I lost my debit card, they issued me a new one, with a new card number. All my automatic withdrawls got screwed up, and I had to reregister with the new card number. Now, it might not help in the case of this Total Protection stuff…but asking for a new card, w/ new card number before canceling, then canceling once recieved, could prevent auto withdrawls.

  7. woogychuck says:

    This is pretty standard. Almost any service you get for you card, such as identity theft protection and disability plans, are done by third parties.

    I’ve run into this a few times when trying to cancel various add-ons to my credit cards.

  8. misstic says:

    Crapital One strikes again. I’m sure it’s all spelled in their terms and conditions but still…

    We paid off two Crapital One cards months ago, sent them a certified letter requesting the accounts be closed, followed all of the rules, etc…got a letter back saying they would cancel but only after two months of inactivity. Next month, a quarterly renewal fee for something we forgot about pops up. Grrr…cancellation clock is reset right? I call to complain, they tell us that the cancellation request is now off and that I must secure in writing proof that this company that charged the quarterly renewal fee is “now aware that we have cancelled this account – please use another form of payment”. Um…okay. I do that, send off the payment so we can be down to zero. Crapital One processes said payment ON the due date but charges us a “late fee” that very same day.

    Bottom line: They suck. We’re still waiting for our 60 days of inactivity to pass.

  9. soup123 says:

    I can semi-understand them allowing charges until the end of the billing cycle (still, if its closed, its closed), but they should at least have sent a bill at the end of the month for it to be resolved right away.

  10. sakimotokitty says:

    They did this to me too-but I had no charges coming to the card so they charged me a “finance charge” that they sent to collections. I escalated the arguement until I had the card closed and for good measure I pressed them to write a letter to all three credit agencies retracting the black mark on my report. They did it-I was surprised.

  11. Munsoned says:

    @AlteredBeast: Good idea, except the last time I reported a missing/stolen credit card, my credit report got dinged. I think it was CapitalOne, in fact.

  12. ethanrik says:

    YUP CAPT SUCKS!! I closed my account on Dec 14th…still waiting for it to get closed….and now Besy Buy says it will only refund my coverage plan to my credit card…so now I have to wait for that refund to get processed and for CAPT 1 to send a check! SHAME ON BB & CPT1

  13. NotATool says:

    Well, at least your closed account was covered under “Total Protection.” I say stick it to them and file a job loss claim so “Total Protection” will cover their own 38-cent charges and the fees will be waived.

  14. GenXCub says:

    Hurry up and get it shifted to BofA so that making a payment will reopen it!

  15. bravo369 says:

    This sounds like it’s becoming prevalent and will be on the next list of items congress is going to bring up when they grill credit card companies about their practices. A closed account should be exactly that…CLOSED! i’d rather get a fee from a company I forgot to take off automatic billing than to rack up fees on an account I don’t even know exists anymore and have no idea how to check.

  16. deadlizard says:

    Looks like he signed up for the Capital One “Hassle” card. Next time, I’d sign up for the “No Hassle” card they advertise.

  17. sleze69 says:

    After reading all the stories of banks/credit cards not closing accounts, I think I will just report my soon to be cancelled mastercard as lost before I finally get rid of it.

  18. noquarter says:

    @soup123: That seems to me like the biggest problem with Capital One’s actions here. Can they legally send an account to collections when, by their own admission, they never even sent a bill?

  19. qgriffith says:

    I think several readers hit the nail on the head, you should report the card “stolen” or lost. So that they can’t charge on it anymore. A month after I closed the account I threw the card away. Lucky I shredded it prior to that, but just think if I didn’t? Someone could of taken the card and charged away with me not knowing. I just don’t understand why they don’t let the automatic withdraws bounce, when the service stops that I had automatic withdrawn I will find out about it. This service however I “thought” was done by Cap One and the fact I had to almost beg to get the phone number to call Total Protection from Cap One was sad. I am sure this happens all the time, you think they would of found a better way to handle this.

  20. deadlizard says:

    @sleze69: Ask if they going to charge you a
    fee for replacing your card/number. Don’t asume you beat the credit
    card. The credit card always wins.

  21. sleze69 says:

    @deadlizard: I would view that as a cancellation fee.

  22. Isn’t this a case of, “If Woody had read the fine print at the beginning, none of this would ever have happened?”

    Terrible anti-consumer practice by a credit card company that’s business model is to target the upper crust of bad credit risks. I speak from experience here, if Cap One is the only card that will approve you, you should probably get some credit counseling and wait until a better company will approve you.

  23. AlteredBeast (blaming the OP one article at a time.) says:

    @ErnieMcCracken: Really? That is pretty crazy, the idea that if someone steals your wallet, that means you are a higher credit risk? Well…I can kinda see that making some sense. Is that something you think would happen w/ all credit card companies?

    Also, there was a story similar to this about a Bank of America checking account that had an electronic withdrawl opening the account back up. If those withdrawls are bound to a debit card, then this technique could work well.

  24. GearheadGeek says:

    It’s not exactly big news that Capitol One is a sleazy credit card provider and is in business to bleed every last cent from its cardholders.

    I know it’s popular sport to “blame the victim” around here, but one assumes a charge for this fee has appeared on every statement for the last 5 years. In fact if it works like most of these scams…er.. protection programs, it was much larger in the months when the statement balance was non-zero.

    How did the customer not realize he still had this service he didn’t want, for FIVE YEARS?

  25. qgriffith says:

    @GearheadGeek: I knew the service was there but never thought about it month after month because the fee was so small, I assumed though that the service was provided by Cap One, and that it was not a third party, since I got the service through Cap One when I signed up for the card, it is not like I got a Cap One card AND then went out and bought the Total Protection from another vendor, it was giving to me at the time of sign up for the card. Because of this I logically thought once I closed the card, that the Total Protection would be closed as well since it was added to the account at the same time as when I opened it. The statements do not indicate that this service is from any other company other then Cap One.

  26. bufftbone says:

    Same thing happened to me. I fought it and won. It affected my credit report but they filed a motion to have that portion removed from my history. It only took 2 months and ome sore vocal cords to get it fixed but it worked.

  27. TicTacPaddyWhack says:

    Why do people always get so angry when they forget to read the disclosures. It’s all spelled out there people. The fact that your card does not “officially” close before the two month period actually could help you.

    @MISSTIC: you talk about a quarterly renewal fee that you forgot about. First, that’s your fault for forgetting to change all of your PADs. Second, if your card had closed right away, any of these forgotten fee renewals or PADs would not go through and the outcome could be much worse – like cancelled services, missed payments at higher interest rates…

    Bottom line – if you want the service – the credit card – read the disclosures. If you have any questions, ask them up front. Don’t wait until you get to the point where you’re angry and upset.

  28. Difdi says:

    So do this: Cancel the card. Then shred the card and throw the pieces in several different garbage cans all over town. Then a couple days later, call them and say “I was planning to destroy my card after canceling, but now I can’t find it anywhere. Good thing I already canceled it, huh?” It’s completely true, as far as it goes, and invokes their lost card protocols. It’s just not the *whole* truth…

  29. veraikon says:

    Wow, this is good to know. I’ll be paying off my Capital One Balance this month and I *thought* I’d be able to cancel it. DUN DUN DUN! Think again, fair consumer!

  30. banmojo says:

    This is exactly why whenever I close an account I will no longer be using (one should always close accounts they won’t use anymore!) I request the name of the person I spoke with and ask them for the incident # or transaction # or whatever their company calls it, THEN I ask them to mail me a statement that the account is zeroed out and has been closed. I don’t rest on it until I have that letter filed away. That’s something you can take to court if need be!


    • Anonymous says:

      @banmojo: I closed my Capital One account in feb 2008 after paying balance off. Received letter of confirmation (at second attempt). Had an annual payment in july to an organization but failed to cancel it. Capital One paid them £36. Account supposedly closed. No statements sent or received. Sent me a letter of default on 6 november this year. Trying to sort it via phone. No joy just saying i have to pay £20 for the last 4 months non payments. Ive had no statements! Requested copies 3 times! Finally got a run off of transactions showing £36 debit in july. No late payments added to ficticious statements. Weird really. No replies to 5 recorded delivery letters until last night. Still want money. Closed account now in default! If i pay them they will halt all action. Surely if an account is closed and you have record that it is closed then no further transactions can be made. I had no idea this request for payment in july was going to be honoured. l will fight them all the way. They have lied about sending statements. If i had received a statement in july with this on i would have queried it right away. Even the company that requested could not believe that they had got money out of a closed account and have offered their services. They have said that i am under no legal obligation to pay Capital One! Going to blow the lid off them if i can. They appear to be operating very underhanded. Watch this space.

  31. joellevand says:

    I lost my job 5 years ago and had to let my Cap One card go into collections.

    5 years, multiple collections agencies, a lawsuit, and several disputes with all three credit reporting agencies later, THEY ARE STILL TRYING TO CHARGE INTEREST on a closed, settled w/a collection agency, and settled in court account!

    What’s in your wallet, indeed.

  32. joellevand says:

    Oh, and I haven’t received a statement since 2002.

  33. warren_piece says:

    i had the same thing happen to me…right before i left for china for 1 year(!!!). as banmojo notes, i made sure to get a zerod out balance and a clean bill of health prior to leaving.
    even still, i was greeted when i returned home by some rather (un)pleasant collectors. so i got things straighted out and…lo and behold…got another bill the very next month. the bill was for nothing (which will be funny in one moment).
    so i called the ol capone boys up again and asked to close the account (third time, now). they said that they couldnt close the account because it didnt exist.
    “it looks like its been closed, sir”
    “right…but im still getting bills”
    “what is the amount being billed?”
    “the amount billed is zero”
    “oh…well then dont worry about it”
    “dont worry about it. if the amount billed is zero then you have nothing to worry about”.
    the hilarity continued for some time.
    never again…thats all i can say. never again.

  34. dhumbert says:

    I know this is an old post, but I just had this experience as well. However, I knew about the payment protection and creditinform and everything, so when I went to close my card and the woman told me the balance had to stay zero for two months before it would close, I specifically asked about those two items. She told me that since I enrolled through Capital One, they would be canceled. Imagine my (lack of) surprise when i found out she was blatantly lying.

    Anyway, I called, canceled the CreditInform, and of course they tried to sell me more stuff. But when I called payment protection to cancel, the woman was so nice. She was shocked that the woman had lied to me. She asked me if I had remembered to cancel CreditInform, then she asked if they had removed their charges. She was incensed when I told her they hadn’t. She offered to remove payment protection charges without me even asking. Granted, it was only 5 cents, but it was still a nice gesture. All in all, quite a pleasant experience.

  35. UNFJoel says:

    I just had this exact same experience! I closed my CapitalOne account in February with a balance transfer to another bank (after CapitalOne raised my interest rate from 8.9% to 14% without telling me…). I’m also on paperless billing so I never got any email or paper statements after I closed my account. The only thing the rep told me was that after two full cycles with a 0 balance that the account would actually close. Fast forward to today. I got a call from the fraud department saying that my credit card number was stolen from a merchant, and again that once my balance reached 0… and I cut him off there and said that it already was 0.

    Apparently it wasn’t. Even though CapitalOne received the full balance payment a full week before the due date on the statement, they were already charging me finance charges on the NEXT MONTHS statement from the point it was generate to the day they received the payment!

    So, I got charged with a finance charge, and since I didn’t know about it I also got a late fee!

    So, I called the normal CSR number talked to a lady with a heavy Indian accent – no good, asked to be transferred to her supervisor. He was a guy with a less heavy Indian accent – he said he couldn’t waive the fee because they had done it for me before at some point. I told him that I know it can be done, so I needed to talk to a real supervisor since I knew he was just a team lead. Finally, got in touch with an American named Jay who actually took care of everything…

    But I was ready to start and EECB!